Across America, workers are seeing miniscule pay raises. But some cities are bucking the trend.
Hourly wages grew at a healthy clip of over 5% in Columbus, Ohio, San Francisco, Virginia Beach, Va. and Louisville, Ky. according to the U.S. Labor Department.
It’s a whole lot better than the overall average hourly earnings in the U.S., which only rose 2.1% in July compared to a year ago.
The slow pace of overall wage growth has worried economists and lawmakers alike. It is the missing ingredient in the U.S. economy’s success and the main reason why many Americans haven’t felt the benefits of the recovery.
The target for healthy wage growth set by America’s central bank, the Federal Reserve, is 3.5%.
But wage gains have been even stronger in some cities.
There are some common threads in all of the cities. In each of them, either (1) the unemployment rate is below the national average or (2) the unemployment rate is moving down at a quick pace.
Translation: More jobs and fewer people available, so employers are paying up to hire workers.
The big winner: Columbus, Ohio — home of the Ohio State Buckeyes. Average hourly earnings rose 6.2% in Columbus in June compared to a year ago. The unemployment rate there is 4.2% — well below the national unemployment rate, 5.3%.
In Rochester, N.Y., and Louisville, Ky., the story is the same: unemployment below the national average and wage gains soaring well above the national figure.
Here are the cities with best wage gains in June compared to the same month last year.
1. Columbus, Ohio: 6.2%
2. San Francisco, Calif.: 6.0%
3. Virginia Beach, Va.: 5.9%
4. Louisville, Ky: 5.9%
5. Rochester, N.Y.: 4.9%
6. Sacramento, Calif: 4.7%
7. Boston, Mass: 4.5%
8. Las Vegas, Nev: 3.9%
9. Raleigh, N.C.: 3.9%
10. Portland, Ore: 3.7%